IEX shares jump 13% post Q1 earnings; was Thursday's crash a knee-jerk reaction?

The company on Thursday posted an over 25% rise in its consolidated net profit to ₹120.69 crore in the June quarter compared to a year ago, mainly on the back of higher revenues.

The company had reported a consolidated net profit of ₹96.44 crore in the quarter ended on June 30, 2024, according to a regulatory filing.

Total income rose to ₹184.17 crore in the quarter from ₹154.47 crore in the same period a year ago.

Its electricity volumes in Q1FY26 stood at 32.4 billion units (BUs), increasing 14.9% year-on-year (YoY).

The company said that 52.7 lakh renewable energy certificates (RECs) were traded during Q1FY26, jumping 149.3% YoY.

During the quarter, with an increase in hydro, wind, and sustained supply from coal-based generation, supply liquidity on power exchanges improved and kept prices competitive.

During the first quarter of FY26, supply liquidity in the Day Ahead Market (DAM) segment grew by 45.2% on a year-on-year basis.

As a result, the price in the DAM averaged Rs 4.41/unit, a decline of nearly 16% YoY.

Similarly, price in the Real-Time Market averaged ₹3.91/unit during Q1 FY26, a decline of 20% compared to Q1 FY25.

On the gas market front, Indian Gas Exchange (IGX) traded record gas volumes of 24.6 million MMBtu during the period under review, a growth of 109% from a year ago, led by a demand increase from oil marketing companies and city gas distribution companies.

During the quarter, IGX recorded a profit after tax of ₹14.1 crore, which was higher by nearly 86.7% compared with ₹7.6 crore a year ago.

In the June quarter, its wholly owned subsidiary International Carbon Exchange (ICX) issued over 44 lakh I-RECs against 59 lakh I-RECs issued in the last financial year.

Revenue for ICX in the June quarter stood at ₹178.8 lakh.

IEX tumbled 30% on Thursday

The stock ended at ₹135.49 on the NSE, down 27.89%.

Market coupling is an economic model used in energy markets to create a single, uniform price for electricity across different trading platforms or exchanges.

The regulator's move is aimed at improving price discovery and system efficiency.

The Central Electricity Regulatory Commission (CERC) said in an order that the day-ahead market segment of all power exchanges will be coupled using a common system.

What IEX said on business outlook

In its investor presentation, IEX said that the gas consumption is expected to increase from the present nearly 200 mmscmd to 400 mmscmd by 2030, providing significant growth opportunity for the company.

The company further said that IGX's share in the overall gas consumption is expected to increase from the present 2% to 4-5% by 2030 (~250 Mn MMBTU; CAGR: ~36%).

Meanwhile, analysts tracking the stock note that power trading is a sunrise sector. The management looks confident to defend their market share (substantially if not completely).